EU-U.S. trade talks face growing hostility, ministers warn

ATHENS (Reuters) - Free-trade talks between the United States and the European Union are in danger of being derailed by populist groups opposing everything from globalisation to multinationals, EU ministers and business leaders said on Friday.

Finland's Minister of European Affairs and Foreign Trade Alexander Stubb gestures as he addresses delegates during the annual meeting of the World Economic Forum (WEF) in Davos January 26, 2013. REUTERS/Pascal Lauener

The rise of anti-EU parties, reports of U.S. spying in Europe and accusations that a trade pact would pander to big companies have combined to erode public support for a deal that proponents say would dramatically increase economic growth.

“We are grappling with people who are anti-European, who are anti-American, who are anti-free trade, who are anti-globalisation and who are anti-multinational corporations,” Finland’s minister for Europe and trade, Alexander Stubb, told his EU counterparts and business leaders at a meeting in Athens.

“We have an uphill battle to make the argument that this EU-U.S. free-trade agreement is a good one,” he said in remarks that were broadcast to reporters.

With the euro zone’s economy barely out of a two-year recession, EU governments see a trade deal with the United States as the best way to create jobs. They say a pact encompassing almost half the world’s economy could generate $100 billion (59 billion pounds) in additional economic output a year on both sides of the Atlantic.

The European Union and the United States already trade almost $3 billion in goods and services each day, and by deepening economic ties, the pact could create a market of 800 million people where business could be done freely.

The EU’s trade chief Karel De Gucht conceded that, outside business circles, there was little public awareness about the proposed Transatlantic Trade and Investment Partnership, which is often known by its initials as “T-TIP”.

“When we talk about T-TIP, some people think it is an extraterrestrial,” De Gucht said.

Nils Andersen of Danish shipper A.P. Moller-Maersk (MAERSKb.CO), who was among chief executives invited to the debate, said there was a danger of voters being “hijacked by populist statements”.

YES OR NO?

Public support is crucial because the European Parliament and the U.S. Congress must ratify the agreement once it is made.

EU lawmakers have already shown a willingness to reject deals they think do not have enough public support - for example the global Anti-Counterfeiting Trade Agreement (ACTA) thrown out in 2012.

U.S.-EU trade talks initially enjoyed a warm reception when they were launched in July last year.

But European consumer and green groups said a deal letting firms operate freely in both the EU and the United states might let companies bypass EU safety and environmental standards.

The talks have also been overshadowed by widespread distrust of Washington caused by reports the United States bugged EU offices and German Chancellor Angela Merkel’s mobile phone.

In the United States, President Barack Obama’s efforts to speed up agreement on the deal, by renewing a ‘fast-track’ trade promotion authority, have faced resistance from members of his own Democratic party, some of them sceptical about the benefits of unfettered free trade.

The ‘fast track’ authority, which expired in 2007, would allow Obama to present the trade to Congress for a simple ‘yes/no’ vote, avoiding the risk of lawmakers picking it apart clause by clause and delaying its chances of becoming law indefinitely.

De Gucht said the EU’s tight regulation in the sensitive issue of genetically modified food would not change, even if Brussels and Washington did sign an accord.

Some Europeans are worried about what impact GM crops and products - often dubbed “Frankenstein Food” - might have on health and the environment.

“We are not dumbing down our standards,” De Gucht said. “I will not agree to put hormone beef on the European market or change our laws on genetically modified organisms.”